London: The India-UK Free Trade Agreement (FTA), officially known as the Comprehensive Economic and Trade Agreement (CETA), signed by Prime Ministers Narendra Modi and Keir Starmer on July 24, will slash trade tariffs from 15 per cent to 3 per cent, providing a major boost to business confidence in a volatile global environment. This was announced to the UK Parliament on Monday by Business and Trade Secretary Jonathan Reynolds.

Reynolds updated Members of Parliament on the pre-ratification process underway before the trade deal can formally come into force under the UK’s Constitutional Reform and Governance Act 2010 (CRaG). “This agreement drops the average Indian tariff on UK products from 15 per cent to 3 per cent, reducing tariff duties by around £400 million initially and rising to £900 million after staged implementation,” he said.

The agreement is expected to increase bilateral trade by £25.5 billion, add £4.8 billion to UK GDP, and boost wages by £2.2 billion annually. Reynolds highlighted that the deal provides UK businesses with preferential access to India’s federal procurement market and guarantees faster, cheaper, and simpler trade through improved customs and digital processes.

The FTA will unlock opportunities across the UK, with an expected £190 million boost for the West Midlands and Scotland, and £210 million for the North West of England, aligning with the UK’s Industrial Strategy to support high-growth sectors. Reynolds emphasized that as India’s economy grows, UK businesses will gain a competitive edge with the fastest-growing economy in the G20.

Reynolds also informed Parliament about the commissioning of the Trade and Agriculture Commission (TAC), Food Standards Agency (FSA), and Food Standards Scotland (FSS) to provide independent advice as part of the ratification process. Legislation to implement the agreement will follow standard parliamentary procedures alongside negotiations for the Double Contribution Convention (DCC), designed to prevent duplication of social security contributions for temporary foreign workers.

The India-UK CETA aims to double bilateral trade to USD 120 billion by 2030. While ratification in India requires only a Cabinet nod, the UK’s parliamentary process could take up to a year. The House of Lords also received updates on the FTA progress from Department for Business and Trade junior minister Baroness Maggie Jones.